Goenka seeks Mahindra board nod to invest ₹800 crore in EVS
MUMBAI: Pawan Goenka, managing director of Mahindra & Mahindra Ltd has sought an approval from its board to invest about ₹800 crore to develop two new electric products, set up a research and development centre for such vehicles to capture a fourth of the electric vehicle market, which it has projected be 250,000 units by 2020, a top company executive said.
“So I have just finishing the budget for electric… So far we wanted to invest about ₹600 crore investment in 3 years... I have just seen subject to board approval, it is going to be higher than that. We will probably end up spending closer to ₹800 crore, maybe even a little more over a 3-year period,” Pawan Goenka, managing director of India’s largest electric vehicle maker, said in an interview.
The board approval is needed in the context of Mahindra seeking an unprecedented increase in manufacturing capacity for electric vehicles. The plan, Goenka said, is to increase the production capacity for such vehicles to 1,000 units a month by the end of 2018 from about 200 units now and eventually to 5,000 units per month by 2020.
“So that means we ourselves are counting on selling 60,000 vehicles in 2020 and obviously we won’t be the only ones and if I assume that we have 25% market share suppose that means the total volume is 2.5 lakh. So 2.5 lakh volume in 2020 would be a good number to have and then we can say yes electric vehicles have arrived,” Goenka said, adding that his estimates are only for four-wheelers, small commercial vehicles, buses and not three wheelers.
Currently, electric vehicle sales are low in India, rising 37.5% to 22,000 units in the year ended March 31, 2016 from 16,000 in the previous year.
Only 2,000 of these were cars and other four-wheelers, according to automobile lobby group Society of Manufacturers of Electric Vehicles.
In its bid to dominate the Indian market amid rapidly changing dynamics in the favour of electric vehicles, Mahindra seem to have an advantage over its traditional rival market leader Maruti Suzuki India Ltd, which does not have electric vehicles.
Maruti is scrambling to put together an electric vehicle plan largely driven by efforts made by its parent Suzuki Motor Corp., which has forged partnerships with Toyota Motor Corp. to work on green vehicles.